The alarm raised by the Senate over the commission charged for the deployment of Remita, an e-payment software, used for the transfer of Federal Government’s funds from financial institutions into a single treasury account (TSA), is nothing but cheap noise-making.
According to Premium Times, the use of the software is not only legal but also represents a drastic cut of the commission previously charged by banks for collection of government revenues.
Also, findings reveal that the commission collected by SystemSpecs, the owners/developers of Remita, is nowhere near the N25 billion Dino Melaye alleged to have been collected by the firm.
Also, findings reveal that the commission collected by SystemSpecs, the owners/developers of Remita, is nowhere near the N25 billion Dino Melaye alleged to have been collected by the firm.
It was Mr. Melaye, who moved the motion on the Senate floor for the payment to be investigated.
Last Wednesday, following Mr. Melaye’s motion, the senate ordered its committee on finance and public accounts to immediately commence an investigation into use of Remita (which it erroneously described as an e-collection agent) for remitting government funds into the TSA; and its alleged collection of N25 billion commission being one per cent of the alleged N2.5 trillion it remitted into the TSA.
Mr. Melaye had argued that the use of Remita was a violation of Section 162(1) of the constitution, which stated that “the federation shall maintain a special account to be called the federation account into which all revenues collected by the government of the federation except the proceeds from the personal income tax of the personnel of the Armed Forces of the Federation, the Nigeria Police Force, the ministry or department of government charged with foreign affairs and the residents of the FCT, Abuja.”
Mr. Melaye further stated that the Central Bank of Nigeria, CBN, could only appoint a registered bank as an agent for collecting and disbursing the funds.
He said that since Remita is not a bank, its appointment as a collection agent is in violation of the CBN Act and the Banks and Other Financial Institutions Act (BOFIA) 2007.
According to him, Remita collected N25 billion “for doing nothing.”
However, documents, including the service agreement between SystemSpecs and CBN; correspondence between the company and the office of the Accountant General/ CBN as well as a letter to President Muhammadu Buhari, seen by PREMIUM TIMES show that not only was the commission charged backed by law, it is shared by the company, commercial banks and the CBN.
Though the commission is nowhere near the exaggerated N25 billion touted by Mr. Melaye, the one per cent charge also represent a drastic reduction from between 2 per cent and 46 per cent commission charged by commercial banks in some instances for collecting government revenues.
In a telephone interview with PREMIUM TIMES, the CBN Director for public communications, Ibrahim Muazu, dismissed the amount quoted on the floor of the senate as “completely misleading.”
“That is false. That is false,” he repeated for emphasis.
“It is grossly exaggerated. We are talking of one per cent. What is one per cent of the money? Have we collected up to a trillion? That is a completely misleading information. Even at the beginning of the TSA the estimation of all the movement of federal government funds into the account is N1.2 trillion,” he added.
When asked to tell the total amount moved into the TSA, Mr Muazu said: “I cannot give you the exact amount now but I know it is far, far, far lower than N2.5 trillion.”
THE AGREEMENT
According to the service agreement between the parties, signed by Eunice Ikekhuah and Aderemi Atanda of SystemSpecs on December 4, 2013, and H.M Yusuf and R.A Olaniyan of the CBN on December 11, 2013, Systemspecs, the CBN will deploy Remita, a T24 banking application, for executing payment instructions and collection of government revenue.
Apart from the collection of revenue, Remita is also used for payment of salaries, payment of taxes, payment of pension, payroll processing biometric verification, among other uses.
In a letter dated November 6, 2015, to Mr. Buhari, SystemSpecs explained that “all commercial banks and over 400 Micro Finance Banks in Nigeria” are connected to the software. The company also explained that 705 Ministries Departments and Agencies (MDA) are currently using the software as payment and collection platform.
So, contrary to Mr Melaye’s argument in the senate, Remita is indeed a software that facilitates the payment of government revenue from financial institutions to a TSA in the CBN and not a revenue collection agent.
Also, contrary to Mr. Melaye’s submission, the entire 1 per cent commission does not go to SystemSpecs, the commission is shared between the CBN, commercial banks, and the company.
“A tariff of 1% of the funds collected shall be charged for the government revenue collections: i. Platform Owner/SystemSpecs: 50%, ii. Collecting Agents/DMBs (banks): 40%, iii. Introducer? CBN: 10%,” the agreement reads.
SystemSpecs further explained that at a seminar organised by the CBN and the Office of the Accountant General of the Federation (OAGF) between May27-28, 2013, it actually proposed a commission of 1.5 per cent, It explained that commercial banks actually proposed 5 per cent, while a committee set up by the CBN and the OAGF, actually proposed 2.5 per cent. It explained that it was the then Accountant-General of the Federation that actually overruled all the suggested commission and reduced it to 1 per cent.
“Look at it this way, you have a product that you are allowing someone to use, it can’t be free,” he said.
Last Wednesday, following Mr. Melaye’s motion, the senate ordered its committee on finance and public accounts to immediately commence an investigation into use of Remita (which it erroneously described as an e-collection agent) for remitting government funds into the TSA; and its alleged collection of N25 billion commission being one per cent of the alleged N2.5 trillion it remitted into the TSA.
Mr. Melaye had argued that the use of Remita was a violation of Section 162(1) of the constitution, which stated that “the federation shall maintain a special account to be called the federation account into which all revenues collected by the government of the federation except the proceeds from the personal income tax of the personnel of the Armed Forces of the Federation, the Nigeria Police Force, the ministry or department of government charged with foreign affairs and the residents of the FCT, Abuja.”
Mr. Melaye further stated that the Central Bank of Nigeria, CBN, could only appoint a registered bank as an agent for collecting and disbursing the funds.
He said that since Remita is not a bank, its appointment as a collection agent is in violation of the CBN Act and the Banks and Other Financial Institutions Act (BOFIA) 2007.
According to him, Remita collected N25 billion “for doing nothing.”
However, documents, including the service agreement between SystemSpecs and CBN; correspondence between the company and the office of the Accountant General/ CBN as well as a letter to President Muhammadu Buhari, seen by PREMIUM TIMES show that not only was the commission charged backed by law, it is shared by the company, commercial banks and the CBN.
Though the commission is nowhere near the exaggerated N25 billion touted by Mr. Melaye, the one per cent charge also represent a drastic reduction from between 2 per cent and 46 per cent commission charged by commercial banks in some instances for collecting government revenues.
In a telephone interview with PREMIUM TIMES, the CBN Director for public communications, Ibrahim Muazu, dismissed the amount quoted on the floor of the senate as “completely misleading.”
“That is false. That is false,” he repeated for emphasis.
“It is grossly exaggerated. We are talking of one per cent. What is one per cent of the money? Have we collected up to a trillion? That is a completely misleading information. Even at the beginning of the TSA the estimation of all the movement of federal government funds into the account is N1.2 trillion,” he added.
When asked to tell the total amount moved into the TSA, Mr Muazu said: “I cannot give you the exact amount now but I know it is far, far, far lower than N2.5 trillion.”
THE AGREEMENT
According to the service agreement between the parties, signed by Eunice Ikekhuah and Aderemi Atanda of SystemSpecs on December 4, 2013, and H.M Yusuf and R.A Olaniyan of the CBN on December 11, 2013, Systemspecs, the CBN will deploy Remita, a T24 banking application, for executing payment instructions and collection of government revenue.
Apart from the collection of revenue, Remita is also used for payment of salaries, payment of taxes, payment of pension, payroll processing biometric verification, among other uses.
In a letter dated November 6, 2015, to Mr. Buhari, SystemSpecs explained that “all commercial banks and over 400 Micro Finance Banks in Nigeria” are connected to the software. The company also explained that 705 Ministries Departments and Agencies (MDA) are currently using the software as payment and collection platform.
So, contrary to Mr Melaye’s argument in the senate, Remita is indeed a software that facilitates the payment of government revenue from financial institutions to a TSA in the CBN and not a revenue collection agent.
Also, contrary to Mr. Melaye’s submission, the entire 1 per cent commission does not go to SystemSpecs, the commission is shared between the CBN, commercial banks, and the company.
“A tariff of 1% of the funds collected shall be charged for the government revenue collections: i. Platform Owner/SystemSpecs: 50%, ii. Collecting Agents/DMBs (banks): 40%, iii. Introducer? CBN: 10%,” the agreement reads.
SystemSpecs further explained that at a seminar organised by the CBN and the Office of the Accountant General of the Federation (OAGF) between May27-28, 2013, it actually proposed a commission of 1.5 per cent, It explained that commercial banks actually proposed 5 per cent, while a committee set up by the CBN and the OAGF, actually proposed 2.5 per cent. It explained that it was the then Accountant-General of the Federation that actually overruled all the suggested commission and reduced it to 1 per cent.
“Look at it this way, you have a product that you are allowing someone to use, it can’t be free,” he said.
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